I am looking for the answer to this assignment. I am not an accounting major and have no clue. Please help Assignment Name: Unit 4 Individual Project
Deliverable Length: 2-3 paragraphs
Details: Les Fleurs, a boutique in Paris, France, had the following accounts in its accounting records at December 31, 20X2 (amounts in Euros, denoted as "E")
Purchases………………...
E250,000
Freight In……………… E8,000
Sales discounts…………. 4,000
Purchase returns…….. 7,000
Inventory Sales…………………. 400,000
December 31, 20X1….. 20,000
Purchase discounts…. 3,000
December 31, 20X2….. 30,000
Sales returns…………. 8,000
Administrative Expenses 20,000
Balance Sheet - December 31, 20X1
Cash 10,000
Inventory 20,000
Owner's Equity 30,000
Compute the following for Les Fleurs during 20X2: (Do not convert the figures to US dollars.)
Net sales revenue
Cost of goods sold
Gross profit
Net income
Balance sheet, December 31, 20X2
Statement of Owner's Equity, December 31, 20X2
To compute the required values for Les Fleurs during 20X2, you will need to follow these steps:
1. Calculate the Net Sales Revenue:
To compute the net sales revenue, you need to deduct sales discounts and sales returns from the total sales. From the given information, the total sales are 400,000 Euros, and the sales discounts amount to 4,000 Euros, while the sales returns total 8,000 Euros. Therefore, the net sales revenue can be calculated as follows:
Net Sales Revenue = Total Sales - Sales Discounts - Sales Returns
Net Sales Revenue = 400,000 - 4,000 - 8,000 = 388,000 Euros.
2. Calculate the Cost of Goods Sold:
To determine the cost of goods sold, you need to sum up the purchases, freight in, and purchase returns while deducting purchase discounts. From the given information, the purchases amount to 250,000 Euros, freight in costs 8,000 Euros, the purchase returns are 7,000 Euros, and purchase discounts equal 3,000 Euros. Therefore, the cost of goods sold can be calculated as follows:
Cost of Goods Sold = Purchases + Freight In - Purchase Returns - Purchase Discounts
Cost of Goods Sold = 250,000 + 8,000 - 7,000 - 3,000 = 248,000 Euros.
3. Calculate the Gross Profit:
To compute the gross profit, subtract the cost of goods sold from the net sales revenue. In this case:
Gross Profit = Net Sales Revenue - Cost of Goods Sold
Gross Profit = 388,000 - 248,000 = 140,000 Euros.
4. Compute the Net Income:
To calculate the net income, you need to subtract the administrative expenses from the gross profit. From the given information, the administrative expenses amount to 20,000 Euros. Hence, the net income is determined as follows:
Net Income = Gross Profit - Administrative Expenses
Net Income = 140,000 - 20,000 = 120,000 Euros.
5. Determine the Balance Sheet as of December 31, 20X2:
To calculate the balance sheet, you need to consider the ending balances of the relevant accounts. From the given information, it is provided that as of December 31, 20X1, the inventory balance is 20,000 Euros. The purchases, freight in, purchase returns, and purchase discounts are accounted for in the computation of the cost of goods sold. Hence, the remaining accounts for the balance sheet are:
- Cash: 10,000 Euros (same as the December 31, 20X1 balance)
- Inventory: 30,000 Euros (ending balance as of December 31, 20X2)
- Owner's Equity: 30,000 Euros (same as the December 31, 20X1 balance)
6. Compute the Statement of Owner's Equity as of December 31, 20X2:
To determine the changes in the owner's equity, you need to consider the net income as well as any additional capital investment or withdrawals by the owner. From the given information, only the net income is provided. Therefore, the statement of owner's equity, as of December 31, 20X2, will include the following:
- Beginning Owner's Equity: 30,000 Euros
- Net Income: 120,000 Euros (computed in step 4)
- Ending Owner's Equity: Beginning Owner's Equity + Net Income
Ending Owner's Equity = 30,000 + 120,000 = 150,000 Euros.
By following these steps, you will be able to compute the required values for Les Fleurs during 20X2.